December 2013 fuel price update

Pump prices creep up again as petrol demand teeters

Petrol and diesel prices have gone up again over the past month – a penny a litre for some drivers, 2p or more for others, the latest AA Fuel Price Report notes.

Between mid November and mid December, the average UK price of petrol has risen from 130.44p a litre to 131.17p while diesel has increased from 137.78p a month ago to 138.61p now.

While the average generally reflects the temporary 1p-a-litre increase in wholesale petrol prices over the past month, many towns saw double the impact on their car fuel bills. Small market and coastal towns that had seen October’s petrol prices fall below 130p a litre for the first time since the spring of 2011 saw them creep back over in November.

Asda

On Wednesday (18/12), Asda reset its national petrol pump price to 126.7p a litre, taking advantage of a new dip in wholesale costs. It was a very welcome Christmas gesture, and the supermarket took the opportunity to challenge other retailers to show more festive spirit at the pump.

However, a couple of independent ‘Santas’ had already nipped in over the weekend with gifts of 124.9p in Shoreditch, London, and 125.9p in Kelvinside, Glasgow.

Sales volume

Unfortunately, that is where the cheer ends. Government statistics for retail sales and fuel consumption show that, despite this autumn’s 7p-a-litre crash in the petrol pump price, petrol sales failed to rebound.

Unlike the aftermath of previous fuel price spikes this year and last year, UK petrol sales in October fell by 26 million litres, from 1.512 billion litres the month before to 1.486 billion.

October’s 1.486 billion litres is a mere seven million litres more than the slump in March 2012 when average petrol prices were heading towards the all-time record of 142.48p a litre (16 April 2012). Then, petrol consumption crashed to 1.479 billion litres. And, comparing year on year, the UK consumed 1.536 billion litres of petrol in October 2012.

Shoring up family budgets

“High pump prices have taught the UK motorist how to save on fuel and the fear is that, although petrol prices are down more than 10p a litre compared to the record of 142.48p, drivers are now applying those savings to shoring up other parts of the family budget, such as rising gas and electricity bills” says Edmund King, the AA’s president.

We can forgive struggling remote rural petrol stations for doing that, but not one of the Big Four supermarkets - drivers will, have and should vote with their wheels and fill up elsewhere

Edmund King, AA president

Rural and coastal towns

“It doesn’t help when hundreds of thousands of drivers in small rural and coastal towns with uncompetitive supermarkets are being charged 4p or 5p a litre more for the cheapest petrol than in neighbouring towns.

"In late November, supermarket petrol in Market Drayton was 6p a litre more expensive than down the road in Stoke-on-Trent. We can forgive struggling remote rural petrol stations for doing that, but not one of the Big Four supermarkets - drivers will, have and should vote with their wheels and fill up elsewhere.”

Nationally and regionally

Regionally, predominantly rural East Anglia and Wales are paying the most for petrol, averaging 131.4p a litre. However, drivers in London, the South East and West Midlands have come off worst from the temporary rise in wholesale petrol and diesel prices, seeing average costs rise by a penny a litre to take them close to the regional highs. In contrast, drivers in the North and Yorkshire and Humberside are enjoying the lowest prices with an average of 130.7p a litre.

At least Londoners are buying the cheapest diesel in the country, despite a 1.2p surge in the average cost over the past month, and now match Yorkshire and Humberside with an average of 138.4p a litre. Scotland’s diesel, the dearest in the UK, averages 139.4p.